June 20, 2011

Permit me to explain what is a bit complicated. Under Federal Rule of Civil Procedure 23, which governs class action, there is a set of preliminary requirements in subsection (a) and then a list of 3 types of class actions in subsection (b). The class must meet all the requirements in (a) and then fit one of the categories in (b). The Scalia opinion (joined by the Chief Justice and Kennedy, Thomas, and Alito) and the Ginsburg opinion (joined by Breyer, Sotomayor, and Kagan) agree that the district court erred in putting the class into the second category in subsection (b), but only the Scalia majority also thought a preliminary requirement in 23(a) was not met. Since all class actions — in any of the (b) categories — must meet the requirements in (a), the Scalia opinion has a much more restrictive effect on class actions.

Let's focus on that disagreement. The proposed class included all current and former female employees of Wal-Mart, well over a million women. Rule 23(a) requires that all the members of the class share a common question of law or fact. Wal-Mart had a policy of decentralizing employment decisions to the store level, and the plaintiffs, attempting to satisfy 23(a), said that Wal-Mart has "a strong and uniform 'corporate culture' [that] permits bias against women to infect, perhaps subconsciously, the discretionary decisionmaking of each one of Wal-Mart’s thousands of managers — thereby making every woman at the company the victim of one common discriminatory practice."

Is this policy of decentralizing decisionmaking a common question? Scalia called it "a policy against having uniform employment practices." There have been cases in which an "undisciplined system of subjective decisionmaking" has been held to violate Title VII (the federal statutory law about employment discrimination). But in the case of Wal-Mart, once the decisionmaking was decentralized to the store level, there would be differences from store to store in how that decisionmaking would be done. Even assuming there was an undisciplined system of subjective decisionmaking in every store, each store would might have its own undisciplined system of subjective decisionmaking. To meet the Rule 23(a) requirement of a common question, Scalia wrote, there would need to be a "specific employment practice" that was applied to all the members of the class, not simply a policy that created the conditions for thousands of stores to devise specific employment practices.

Ginsburg thought that Wal-Mart's delegation of discretion, "uncontrolled by formal standards, has long been known to have the potential to produce disparate effects."

Managers, like all humankind, may be prey to biases of which they are unaware. The risk of discrimination is heightened when those managers are predominantly of one sex, and are steeped in a corporate culture that perpetuates gender stereotypes."...

Ginsburg tried to portray Scalia as importing a requirement that the common questions predominate over the individual questions. (That actually is a requirement in one of the subsection (b) categories.) But that's not what Scalia did. Scalia said that the decentralization move simply wasn't a question in the case and that the actual questions are specific to the store level and not to the entire class the plaintiffs attempted to define.

ADDED: After reading the case and trying to explain it as clearly as I could, I've been reading some of the press accounts, and... I can't say I'm surprised, but what politicized drivel!

42 comments:

What if it was discovered that the management in a single store in Dykeville, CA had a blatantly sexist local culture that clearly discriminated against men. Would that in itself fail the preliminary requirement?

On the other hand, this time Ginsberg chose the weapons. And, they had a paper duel. Scalia won.

Again, Walmarts caters to poor people. True, they also attract a 2nd Amendment crowd. But, basically, it's a place where poor people shop. To save money.

Who else would run to "blue light specials?"

As a matter of fact, when Sam Walton started, he began by advertising everything in his store was made in America. (Then? All those manufacturing jobs left. So, he, too, began importing apparel and other stuff, from China.) The customers didn't complain!

The average customer at Walmarts does NOT read the NY Times. Or take advice from the hiarachy in the Catholic Church! They shop on Sundays!

And, I'd also bet that Walmarts has is in-house legal department. You can't be that big without it. And, without a unit dedicated to investor relations.

If there were lawyers who saw they'd gain $14 million in booty. They lost.

Once the Supreme's wanted to take the case, you could assume there was something about the 9th's decision that "forced" the supreme's hand.

Slapping the 9th around, however, is not at all unusual.

Ginsberg used to head up the ACLU. She's a textbook example of getting exactly the product that was advertised.

And, I'd also bet that Walmarts has is in-house legal department. You can't be that big without it. And, without a unit dedicated to investor relations.

They do have in-house legal, but appear to be hiring temporary lawyers from firms to help out there. They also use outside counsel. There is a subtle distinction there in regards to ethics (which is neither here nor there as to the current case here).

Ann - thanks for the explanation. I haven't had anything to do with class action law suits since I took Civil Procedure over 20 years ago. It was a nice summary, and helped me understand the case a bit better.

Managers, like all humankind, may be prey to biases of which they are unaware. The risk of discrimination is heightened when those managers are predominantly of one sex, and are steeped in a corporate culture that perpetuates gender stereotypes.

Sounds like elementary school to me. Sucks to be a boy. Hell, it sucks to be bright.

Even though I agree with the result, I have to admit it was a close call.

As an aside, Professor, I have to say I had to pull up FRCP 23 to follow your explanation. I'm not being critical, it's a difficult point to explain. And like Bruce Hayden, it took me back over 30 years to my first-year Civ Pro class.

I made nearly $20 from a class action suit filed on my behalf. I bought my Roth IRA in 1999. I've put about $40k into it and it's now worth about $60k. The settlement was paltry, but it did wonders for the fund family's image.

People thought it was scandalous that long term shareholders redeemed shares when the share price peaked. It took the lawyers and judges nearly eight years to figure out the appropriate compensation for the new investors who bought at the peak of the dotcom bubble.

I'm not a lawyer (but I play one on TV!) but I see some hope for shooting down Obamacare here.

It seems to me that Walmart argued that they had no policies at all at the corporate level regarding hiring and promotion at stores. These decisions were up to the stores. Ginsberg tried to argue that "no policy" was itself a policy. That letting others decide was itself a decision. Scalia argued otherwise. No policy is not itself a policy.

But this does sound like a preamble to whether a decision not to buy a product is engaging in commerce. I bet the same four argue that just like not having a policy is itself a policy, not entering a market is a decision affecting commerce, and thus falls under the commerce clause. Then Scalia, Alito, Thomas, and Roberts argue similar to this case: not engaging in commerce is not engaging in commerce.

ISTM all the Justices found that plaintiffs' class action theory lacked merit and that the Ninth Circuit decision certifying the class was wrong.

Even the dissent would have reversed the Ninth Circuit and remanded it to allow the plaintiffs another chance to attempt to show the commonality required by Rule 23a.

That result would still leave the plaintiffs with the conceptual problem of showing that a decentralized management scheme created any common issue of law or fact present in all Wal-Mart stores that effected all plaintiffs.

A female version of one of the other conservative justices would be great, but what we really need is a female Scalia to counter the impression that women are soft-headed and anti-rational, an impression left by so many female judges lately.

I just got a notice that I might be the beneficiary of a class-action suit against my insurance company, and if I would just fill in the enclosed questionnaire and mail it in, I might stand to collect as much as $12.

I like how Ginsberg stereotypes Walmart corporate culture as institutionally sexist with no real proof, other than some women whined to a judge about their unhappiness with working there and expressed their inability to imagine that someone else was chosen over them because that someone else was a better worker.

Go down to any Wal-Mart that has a bakery. Ask them to leave their freezer door open for two minutes, or as long as it takes for the temperature to rise two degrees. Listen for the incoming phone call from Bentonville demanding to know what happened to the freezer.

There is nothing - NOTHING - that happens at any Wal-Mart store that Bentonville does not know about. Wal-Mart successfully lied to the Supreme Court and created a neigh-invulnerable case of plausible deniability for the future, and five of the SCOTUS bought it hook, line and sinker.

I took a few of my friends to task to read the damned decision rather than a press account, indeed.

("Too big to fail", as some particularly stupid accounts put it?

Well, yeah, except for the way everyone involved can still sue for any harms, and even do so as a class action - just not this one with a national scope!

And none of the reporting that I've seen even mentioned the dismissal of the "sociological" evidence of being "open" to a "culture" that might maybe possibly support discrimination, maybe 5% or maybe 95% of cases.

I was disgusted that the original court even allowed that level of 'expert' testimony.

As someone with scientific inclinations that actively angers me, in that it's a lot of words replacing "I have no idea if anything bad actually happened", with the intent of making it appear that something did.)

What someone wants to do (other than collect on a class action suit that none of the "class" will see a dime of) is to force a situation where employers are legally prohibited from having any sort of discretion at all over rewarding employees. What this means to ME is that I'm screwed. Under the new and approved system it wouldn't matter how I do my job as long as I make sure I have ticks in all the right boxes. Anything apart from that is useless to me and I might as well not bother.

Private companies would start to mirror the high efficiency and merit based promotional system of federal government and public schools. Groovy!

I was disgusted that the original court even allowed that level of 'expert' testimony.

Then, Dr Science, wasn't it the lower court's fault for not demanding ...sufficient proof, and making a decision based on only one "expert"'s testimony? (Dr Bielby, right). So in effect Doc Scalia & Co seize on that one fact--ie, the expert did not prove his case, did not have good data, inconclusive, etc--to overturn the suits of ...a few thousand women?? Sounds like bullshit to us. The SC really isn't qualified to speak on empirical/evidential matters anyway. They merely bark--not proven/established, generalized, etc-- and Walmart monster marches on.

It would seem the SC shouldn't have taken the case in the first place, assuming it was that obvious, and "evidentiary"--except to make some ...political statement perhaps--like "don't bother, worker-serfs".

There is nothing - NOTHING - that happens at any Wal-Mart store that Bentonville does not know about.

While Walmart does have the most sophisticated non-governmental computer system in the world and is therefore able to collect incredible amounts of information from individual stores, the management decisions are, in fact, decentralized.

In short, if you want to sue Corporate Wal-Mart over Corporate policy/behaviour, you should not try to justify your suit by pointing at *local* Wal-mart behaviour. Without the "glue" to show that the cherry-picked discrimination suits they have bundled together are the fault/responsibility of a unifying force, all they have is a bunch of individual cases. Their search for a jackpot justice case has failed, dreams of a multi-billion dollar payday are now dust.

Here's what Supreme court decisions, including this decision, are really about (warning--not PC):

the catholic sort of mobsters (led by Big Tony "the Tiger" Scalia, with his lieutenant Clarence "Mr T" Thomas) don't ever want to follow orders from the jew mobsters (led by like Stevie "the Badger" Breyer, and the "Yentas", Ruth BG, Kagan, etc). Doesn't really matter what the topic is -- both gangs are business-oriented, and wannabe-royalists anyway.

That's it in a nutshell--the cracker WASPs , mentioning Jefferson, Due Process, rights, etc--that shit was over some time in the 50s.